District 1,
Marine Engineers Beneficial Association, AFL-CIO (MEBA or Union) filed a request
for assistance with the Federal Service Impasses Panel (Panel) to consider a
negotiation impasse under the Federal Service Labor-Management Relations Statute
(Statute), 5 U.S.C. § 7119, between it and the Panama Canal Commission,
Balboa, Republic of Panama (PCC or Employer).

After
investigation of the request for assistance, the Panel determined that the
dispute, which concerns penalty pay for licensed marine engineers for performing
unlicensed work, should be resolved through written submissions from the
parties, with the Panel to take whatever action it deemed appropriate to resolve
the impasse. Written submissions were made pursuant to this procedure, and the
Panel has now considered the entire record.

BACKGROUND

The Employer assists vessels in
transiting the Panama Canal. The Union represents approximately 130 licensed
marine engineers. The parties recently reached agreement on a new
collective-bargaining agreement (CBA), with the exception of the penalty pay
issue, which affects assistant engineers (AEs). The Panel’s decision on the
matter will be incorporated into the new CBA.

If licensed engineers are
required to perform the duties of work commonly assigned to the unlicensed
personnel (such as being required to soogie, paint, scrape, chip, scale
paint, clean grease extractors, polish brightwork, blow boiler tubes, clean
purifiers, strainers, filters or smoke detectors, or perform any cleaning up
work in the engine department), when the unlicensed personnel are not
available for such work, the licensed engineers shall receive, in addition
to their regular compensation, the premium rate while such work is being
performed. The premium pay for such work shall be $11.29 an hour. The rate
shall be adjusted annually on the anniversary date of this agreement in
accordance with the Premium/Penalty rate paid to licensed engineers employed
by the Military Sealift Command. If work for which premium pay is authorized
is performed when overtime is in effect, the higher rate is applicable.

Its proposal should be adopted
because "it is a standard provision in both private sector and government
maritime contracts."(1) In this regard, since the parties last negotiated
their CBA in 1988, the Employer has "substantially reduced" the number
of unlicensed engine room personnel performing less-skilled maintenance duties
on its vessels, and has "routinely scheduled" AEs to complete such
duties on many shifts. This practice is "in contravention of work standards
throughout the maritime industry." The proposal also is consistent with
Congressional intent in enacting 5 U.S.C. § 5348(b) that the pay of Canal
vessel employees be guided by prevailing practices in the U.S. maritime
industry. This position was supported by the Federal Labor Relations Authority (FLRA)
in its analysis of the negotiability of a previous Union proposal regarding wage
rates.(2)

With respect to the Employer’s
"core" argument, there is no merit to its position that the Union
ostensibly endorsed the 1984 manning study which called for replacing lower
graded "oilers" with AEs, and therefore "somehow agreed"
that they should perform unlicensed work as part of their normal duties.
Although the Union’s representative at the time supported the hiring of
additional AEs, "there is no evidence that the Union agreed that it was a
good idea to remove oilers from the vessels." In this regard, the position
descriptions (PDs) on which the PCC relies "did not accurately reflect the
duties of the licensed engineers." The Panel should also reject the
Employer’s attempt to distinguish its situation in Panama from the rest of the
U.S. maritime industry. The fact that MSC operates deep sea vessels which do not
return to port at the end of a shift, while unit employees leave their vessels
every day, "has nothing to do with the issue of whether they should be
compensated with penalty pay when they perform unlicensed work." Finally,
the Employer can entirely control the costs of the proposal by staffing its
vessels so that licensed personnel are not performing unlicensed work. This
would provide an incentive for the Employer to eliminate the "perverted
bureaucratic practice, rampant throughout the Federal government" of
regularly assigning less skilled duties to higher graded personnel.

2. The
Employer’s Position

The Panel should order the Union to
withdraw its penalty pay proposal for a number of reasons. By way of background,
the Employer completed a study of towboat engineers and maintenance requirements
in 1984 which concluded that significant improvements would occur by manning the
engine rooms of the towboats with a single individual with a skill level higher
than an oiler but less than a chief engineer. It was subsequently determined
that AEs would satisfy the requirement. MEBA "fully endorsed the study’s
conclusion to replace oilers with AEs, and it was always known that AEs would
perform oiler duties." The Union also "participated in and was fully
apprised of the development" of the new PD for AEs reflecting the
additional duties. Thus, its prior endorsement of the study’s recommendations,
which have now been implemented, provides one reason for rejecting the Union’s
proposal.

In addition, the pay practices set
forth in the private and government maritime contracts cited by the Union
provide no basis for adopting its proposal. In this connection, neither of the
statutory authorities governing the pay practices of Federal sector maritime
employees, 5 U.S.C. § 5348(a) or 5 U.S.C. § 5348(b), are applicable to PCC.(3)
Moreover, "there is a universe of difference" between the conditions
of employment of the AEs who would be affected by the Union’s proposal, and
those covered by the private and Federal sector contracts upon which the Union
relies. For example, in the case of MSC, Congress mandated that its licensed
engineers be compensated in accordance with the pay practices in the maritime
industry under 5 U.S.C. § 5348(a). Such engineers "all work on ocean-going
vessels and the minimum ‘tour of duty’ at sea (without leave) is 6
months" (emphasis in original). PCC engineers, on the other hand, work
aboard floating equipment which is "always within close sight of the
Canal’s 50-mile shoreline, and are home after every 8-hour shift"
(emphasis in original). An examination of PCC engineer licensing requirements
clearly shows that "there is no similarity here to wage and employment
practices of the maritime industry." Paying additional compensation for
lower graded duties also "would stand on its head" those position
classification principles which the PCC has always applied to its employees.

The more appropriate pay practices
with which to compare PCC employees are those in the Republic of Panama. A PCC
AE’s entry salary is $39,187, and in 1994, gross wages were as high as $72,800
for those AEs at the top step of the wage scale. In contrast, engineers employed
by Smit International Harbor Towage (Panama, Inc.,) which operates tugs in the
ports located at either end of the Canal, have an entry salary with overtime of
$12,787 per year. The fact that there are 89 qualified applicants currently on
file seeking employment with PCC as AEs "is a clear message PCC is a highly
desirable employer."

Finally, the Union’s proposal
would significantly increase PCC’s costs. In this regard, a "conservative
estimate" of the additional costs already incurred by PCC since it
"traded" the lower paid oilers for the higher paid AEs is $827,800 per
year. The Union’s proposal would add at least another $89,600 per year,
assuming the oiler work force remains at existing levels, and the number of
assigned tasks on which the estimate is based remains fixed.

CONCLUSIONS

Having carefully reviewed the
evidence and arguments presented by the parties in this case, we conclude that
the Union should withdraw its penalty pay proposal. Preliminarily, there is
ample evidence in the record to persuade us that the Union acquiesced in the
changes the Employer intended to make as a result of the 1984 manning study,
including requiring assistant engineers to perform lower graded duties without
additional compensation. Of particular note in this regard, the record reflects
that in late 1989 the parties settled a Union grievance involving a disagreement
over, among other things, the PD of AEs. Significantly, the disagreement did not
involve the PD’s clear wording that AEs would be required to perform lower
graded maintenance duties, nor is there any evidence that the Union raised any
concerns regarding the Employer’s intentions at any time before the removal of
oilers from watchstanding duties began in 1993. It was only after the changes
were made, and a significant number of AEs were hired, that the Union raised the
issue of penalty pay for the first time.

In addition to rejecting the Union’s
position on the basis of the historical circumstances surrounding the penalty
pay issue, we believe that adoption of the Union’s proposal would be
inconsistent with the Congressional intent expressed in 5 U.S.C. § 7101 that
the Statute be interpreted in a manner consistent with the requirement of an
effective and efficient Government. In our view, the Employer’s uncontested
estimates of the overall costs of the proposal, including the sums already
invested in the hiring of the additional AEs which the Union fully supported,
outweighs the Union’s private and Federal sector comparability data. For these
reasons, we shall order the Union to withdraw its proposal.

ORDER

Pursuant to the authority vested in
it by section 7119 of the Federal Service Labor-Management Relations Statute, 5
U.S.C. § 7119, and because of the failure of the parties to resolve their
disputes during the course of proceedings instituted under the Panel's
regulations, 5 C.F.R. § 2471.6(a)(2), the Federal ServiceImpasses Panel under § 2471.11(a)
of its regulations hereby orders the following:

The Union shall withdraw its
proposal.

By direction of the Panel.

Linda A. Lafferty

Executive Director

December 20, 1995

Washington, D.C.

1.In support of the comparability of its proposal, the Union submitted relevant sections of a number of private and Federal sector contracts, among them, the private sector multi-employer “Dry Cargo Agreement” with MEBA, the Military Sealift Command (MSC)-MEBA collective bargaining agreement, and the National Oceanic and Atmospheric Administration (NOAA)-MEBA contract covering licensed marine engineers employed aboard NOAA’s oceanographic research vessels. It also submitted a copy of MSC’s Civilian Marine Personnel Instruction 610, which contains a penalty pay provision nearly identical to that found in the MEBA Dry Cargo agreement.

3.In support of its contention, the Employer supplies a brief history of the origins of 5 U.S.C. § 5348(b) and “the vessel employee issue” as it pertains to the Panama Canal. “After extensive research into the vessel employee issue,” the Employer argues that the Panel should accept its conclusion that licensed marine engineers are not “Canal vessel employees” as contemplated under 5 U.S.C. § 5348(b), and that the FLRA “was incorrect” to the extent that it implied otherwise in MEBA and PCC.